Section 12(5) provides that notwithstanding any prior agreement to the contrary, any person whose relationship with the parties or counsel or the subject-matter of the dispute falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator. The proviso allows parties to waive this ineligibility by an express agreement in writing after disputes have arisen.

The object is to ensure that arbitrators are independent and impartial, and that the arbitral process is not tainted by relationships that could influence the arbitrator’s decision. It is a mandatory provision that cannot be circumvented by contract or conduct.

Yes. The ineligibility under Section 12(5) goes to the root of the arbitral tribunal’s jurisdiction. An award passed by an ineligible arbitrator is a nullity and cannot be enforced.

The 2015 Amendment introduced Section 12(5) and the Seventh Schedule, making the ineligibility provision mandatory. It is a substantive provision that applies prospectively from 23 October 2015.

The Seventh Schedule provides a statutory list of relationships that render a person ineligible to be an arbitrator. If an arbitrator falls within any of these categories, they are de jure ineligible and cannot act as an arbitrator unless the parties expressly waive the ineligibility in writing after disputes arise.

Ineligibility means the person cannot be appointed as an arbitrator at all. It is different from a challenge under Section 12(3), which requires the party to prove lack of independence or impartiality. Ineligibility under Section 12(5) is automatic and does not require proof of actual bias.

Yes. The ineligibility goes to the root of the tribunal’s jurisdiction. It can be challenged at any stage, including in proceedings under Section 34 or even at the enforcement stage under Section 36.

The proviso to Section 12(5) states that parties may, by an express agreement in writing, waive the applicability of Section 12(5). The agreement must be made after disputes have arisen, not before. This ensures that the waiver is informed and voluntary.

The requirement that the waiver be after disputes arise ensures that the parties are aware of the specific dispute and the potential conflict of interest before agreeing to waive the ineligibility. A pre-dispute waiver in the arbitration agreement is not sufficient.

“Express” means clearly stated, not implied. The waiver must be explicit and unambiguous. It cannot be inferred from conduct, silence, or participation in the arbitration.

The agreement must be in writing. It can be a separate agreement, a memorandum of understanding, or a clause in a settlement agreement. It must clearly state that the parties waive the applicability of Section 12(5).

Section 12(5) is a mandatory provision that goes to the root of the tribunal’s jurisdiction. The proviso requires an express written agreement after disputes arise. Conduct, no matter how extensive, cannot substitute for this requirement.

Section 4 provides for deemed waiver of the right to object. However, the Delhi High Court has held that Section 4 does not apply to Section 12(5). The ineligibility under Section 12(5) is not a mere procedural irregularity that can be waived by conduct.

In N.S. Associates v. LIC, the Delhi High Court held that ineligibility under Section 12(5) can only be waived by an express written agreement. The conduct of the parties cannot lead to an implied waiver.

In Bhadra International v. Airports Authority of India (2026), the Supreme Court held that the principle of equal treatment under Section 18 applies to the appointment of arbitrators. A unilateral appointment by one party is contrary to this principle.

The decision establishes that the ineligibility under Section 12(5) is a statutory ineligibility that operates by operation of law. It cannot be waived by conduct. The waiver must be express and in writing after disputes arise.

The Supreme Court held that “express agreement in writing” means that the right to object cannot be waived by implication. The parties must expressly agree in writing to waive the ineligibility.

The Delhi High Court has consistently held that a unilateral appointment of a sole arbitrator is invalid if the parties did not expressly waive Section 12(5) after disputes arose. The ineligibility cannot be waived by conduct.

The leading decisions include: (1) Air Force Naval Housing Board v. N.G. Constructions (2026); (2) Mahavir Prasad Gupta & Sons v. Delhi Government (2025); (3) N.S. Associates v. LIC (2024); (4) Engineering Projects India Ltd. v. Allied Construction (2026); (5) Matsy Fincap v. Mohammed Haseenuddin (2026); and (6) Hanson Agro v. Gail (India) (2026).

In Air Force Naval Housing Board v. N.G. Constructions (2026), the Air Force Naval Housing Board unilaterally appointed a sole arbitrator through its Chairman. The arbitrator made a disclosure, but neither party objected. Both parties participated in the proceedings.

Justice Avnish Jhingan held: “In the absence of an express written agreement between the parties to waive the applicability of Section 12(5), a unilateral appointment is void ab initio. Filing a statement of claim or participating in the proceedings cannot be construed as a waiver under the proviso to Section 12(5).”

The decision clarifies that even if a party participates in the arbitration without objection, the unilateral appointment remains void. The ineligibility is a jurisdictional defect that cannot be cured by acquiescence.

In Mahavir Prasad Gupta & Sons v. Delhi Government (2025), the Delhi Government unilaterally appointed an arbitrator. The arbitrator passed an award of ₹1.76 crore in favour of the contractor. The Commercial Court set aside the award for violation of Section 12(5).

Justices Vibhu Bakhru and Tejas Karia held: (1) A unilateral arbitrator appointment clause is invalid; (2) Only an express written agreement can waive Section 12(5); (3) An award by a unilaterally appointed arbitrator is void; (4) The appointing party can also challenge the award under Section 34.

The decision establishes that an award passed by a unilaterally appointed arbitrator is void and cannot be enforced. It also clarifies that the appointing party itself can challenge the award.

Justice Sachin Datta held that ineligibility under Section 12(5) can only be waived by an express written agreement. The conduct of the parties cannot lead to an implied waiver. Section 4 does not apply to Section 12(5).

The decision clarifies that the ineligibility under Section 12(5) is not a mere procedural irregularity that can be waived by conduct. It is a substantive jurisdictional defect.

In Engineering Projects India Ltd. v. Allied Construction (2026), the Delhi High Court held: “The waiver under the proviso to Section 12(5) must be express and in writing. The conduct of EPIL in appointing the arbitrator is not sufficient to escape the rigours of Section 12(5).”

The ineligibility goes to the root of the jurisdiction and cannot be cured by conduct. The appointing party can also challenge the appointment.

The award is a nullity because the ineligibility goes to the root of the tribunal’s jurisdiction. An award passed by an ineligible arbitrator is void ab initio.

Yes. Under Section 34(2)(b), the court can set aside an award on its own motion if it finds that the award is contrary to public policy.

Yes. In Govra Petrochem v. Alpha Chem (2026), Justice Harish Vaidyanathan Shankar held that an award can be declared unenforceable at the execution stage even if it was not challenged under Section 34.

When drafting arbitration agreements, avoid clauses that allow one party to unilaterally appoint the sole arbitrator. Such clauses are invalid and unenforceable.

Adopt a neutral appointment mechanism, such as appointment by a neutral third party or by the court under Section 11.

If the parties wish to waive the ineligibility, they must do so by an express written agreement after disputes arise. A pre-dispute waiver is not sufficient.

Before participating in arbitration, verify that the arbitrator was validly appointed. If the appointment was unilateral, challenge it at the earliest opportunity.

The ineligibility can be challenged at any stage, including under Section 34 or at the enforcement stage. Do not delay in raising the objection.

A unilateral appointment is when one party to the dispute has the sole power to appoint the arbitrator, without the consent or involvement of the other party.

A unilateral appointment is invalid because it violates the principle of equal treatment under Section 18 and the ineligibility provisions under Section 12(5).

Section 12(5) provides that any person whose relationship with the parties or counsel or the subject-matter of the dispute falls under any of the categories in the Seventh Schedule shall be ineligible to be appointed as an arbitrator.

The Seventh Schedule lists the relationships that render a person ineligible to be an arbitrator. These include being an employee, consultant, advisor, or having a financial interest in the dispute.

Yes, but only by an express agreement in writing after disputes have arisen. A pre-dispute waiver is not sufficient.

It means a clear, explicit, and written agreement between the parties to waive the applicability of Section 12(5). It cannot be implied from conduct.

No. Participating in arbitration, filing a statement of claim, or failing to object to a disclosure does not amount to waiver.

The appointment is void ab initio, and any award passed by the unilaterally appointed arbitrator is a nullity and cannot be enforced.

Yes. The Delhi High Court has held that the appointing party can also challenge the appointment.

Yes. The award can be declared unenforceable at the execution stage even if it was not challenged under Section 34.

The Supreme Court held that the principle of equal treatment under Section 18 applies to the appointment of arbitrators. A unilateral appointment is contrary to this principle.

The Delhi High Court held that a unilateral appointment is void ab initio in the absence of an express written agreement to waive Section 12(5).

The Delhi High Court held that an award by a unilaterally appointed arbitrator is void and cannot be enforced.

The Delhi High Court held that ineligibility under Section 12(5) can only be waived by an express written agreement, not by conduct.

When drafting arbitration agreements, avoid unilateral appointment clauses and adopt a neutral appointment mechanism. If you want to waive Section 12(5), do so expressly in writing after disputes arise.

Appointment of an arbitrator by one party without the consent or involvement of the other party.

The provision that makes a person ineligible to be an arbitrator if they have a relationship listed in the Seventh Schedule.

The list of relationships that render a person ineligible to be an arbitrator.

A clear, explicit, and written agreement between the parties to waive the applicability of Section 12(5).

Void from the beginning; having no legal effect from the start.

Something that is legally invalid and has no effect.

The principles that guide the courts in protecting the public interest and ensuring fairness.

The provision for setting aside an arbitral award.

The provision for enforcement of an arbitral award.

The provision for appointment of arbitrators by the court.

The provision for equal treatment of parties in arbitration.

The provision for deemed waiver of the right to object.